Britain's low productivity rate is the result of inadequate training provision for employees. The Government is tackling the skills shortfall head-on to ensure the availability of real talent across all sectors.
Ask a group of business leaders what really causes them grief and the chances are that red tape, late payment and skills shortages will all get a mention. Some headaches you may just have to live with, but business does have to be conducted within the rule of law, and at least late payers can now be charged interest.
Skills shortages are different - we can do something about them. Employers don't have to resign themselves to being permanently lumbered with inefficient human resources; passive acceptance of an under-skilled workforce is not a viable long-term strategy for any business organisation.
Most managers know this. In fact, it is hard to avoid the depressing list of statistics that confirm the challenge faced by the apparently healthy UK economy in matching the productivity of competitor nations.
The UK stands 11th out of 15 in the EU for GDP output per head, and 18th out of 30 in the OECD.
Professor Mike Campbell, Director of Policy and Research at the Sector Skills Development Agency (SSDA), points out: 'The best British companies are among the best in the world, but there is a long tail of under-performing businesses out there too, and that is where the improvement has to come.'
The low-skills culture has been tolerated for so long in this country that it is hardly surprising if some business leaders have given up hope of seeing any improvement in the situation. The complaints are familiar.
Talent is hard to come by and thin on the ground. It seems that poaching other people's staff is the only way of rapidly acquiring the skilled workforce that is needed.
But this is how the downward spiral of underperformance is set in motion.
Why train staff that are going to be poached by someone else? Why bother investing in people when you can always try to cut costs further, outsource certain tasks and functions to the developing world, and try to compete on price alone? Britain's doing OK, isn't it? Don't they keep telling us that we're the fourth-largest economy in the world, with low unemployment and low inflation?
Of course, the main reason why Britain is the fourth-largest economy today is that it used to be the largest. Fourth place represents relative decline. And for an OECD nation like the UK, the low-skills, low-cost, low-quality strategy described above is doomed. China, India and the rest of the developing world are industrialising fast, offering, in some areas, world-class manufacturing and services at a fraction of the cost of the developed world. The low road is the road to ruin for British business.
So, for UK employers, self-interest dictates that the low-skills culture has to be smashed. We need a rich and deep pool of talent to hire from.
We must remove lingering fears about poaching, and ensure that every part of the supply chain is striving for the quality that, alone, will ensure survival in this increasingly competitive world.
Employers cannot achieve this on their own. However committed they may be to raising the skill levels of their staff, employers need an intelligent and responsive network of training providers, offering relevant and practical support in the drive to improve employees' capabilities. Within specific business sectors, in particular, employers need to know that concerted action will underpin their efforts to boost skills within their businesses and organisations.
The following pages outline how the new strategic agenda for skills will be delivered. For the first time, perhaps, the reasonable expectations of employers are going to be met.